Hedge Funds Are Piling Into Uber Technologies, Inc. (UBER)

Many prominent investors, including Warren Buffett, David Tepper and Stan Druckenmiller, have been cautious regarding the current bull market and missed out as the stock market reached another high in recent weeks. On the other hand, technology hedge funds weren’t timid and registered double digit market beating gains. Financials, energy and industrial stocks initially suffered the most but many of these stocks delivered strong returns since November and hedge funds actually increased their positions in these stocks. In this article we will find out how hedge fund sentiment towards Uber Technologies, Inc. (NYSE:UBER) changed recently.

Uber Technologies, Inc. (NYSE:UBER) investors should be aware of an increase in activity from the world’s largest hedge funds lately. Uber Technologies, Inc. (NYSE:UBER) was in 143 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 135. This means the bullish number of hedge fund positions in this stock currently sits at its new all time high. Our calculations also showed that UBER ranked #7 among the 30 most popular stocks among hedge funds (click for Q3 rankings).

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Keeping this in mind we’re going to analyze the recent hedge fund action surrounding Uber Technologies, Inc. (NYSE:UBER).

Keith Meister of Corvex Capital

Do Hedge Funds Think UBER Is A Good Stock To Buy Now?

At third quarter’s end, a total of 143 of the hedge funds tracked by Insider Monkey were long this stock, a change of 6% from the second quarter of 2021. On the other hand, there were a total of 100 hedge funds with a bullish position in UBER a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

More specifically, Altimeter Capital Management was the largest shareholder of Uber Technologies, Inc. (NYSE:UBER), with a stake worth $1097.6 million reported as of the end of September. Trailing Altimeter Capital Management was Tiger Global Management LLC, which amassed a stake valued at $929.3 million. Coatue Management, Point72 Asset Management, and D E Shaw were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Tenzing Global Investors allocated the biggest weight to Uber Technologies, Inc. (NYSE:UBER), around 20.06% of its 13F portfolio. Marathon Partners is also relatively very bullish on the stock, designating 19.35 percent of its 13F equity portfolio to UBER.

As aggregate interest increased, some big names were leading the bulls’ herd. Viking Global, managed by Andreas Halvorsen, initiated the biggest position in Uber Technologies, Inc. (NYSE:UBER). Viking Global had $286.4 million invested in the company at the end of the quarter. Jimmy Levin’s Sculptor Capital also initiated a $201.9 million position during the quarter. The other funds with new positions in the stock are Keith Meister’s Corvex Capital, Bijan Modanlou, Joseph Bou-Saba, and Jayaveera Kodali’s Alta Park Capital, and Sahm Adrangi’s Kerrisdale Capital.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Uber Technologies, Inc. (NYSE:UBER) but similarly valued. These stocks are Altria Group Inc (NYSE:MO), Brookfield Asset Management Inc. (NYSE:BAM), Mercadolibre Inc (NASDAQ:MELI), Blackstone Inc. (NYSE:BX), The PNC Financial Services Group Inc. (NYSE:PNC), Equinor ASA (NYSE:EQNR), and Canadian National Railway Company (NYSE:CNI). This group of stocks’ market caps resemble UBER’s market cap.

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As you can see these stocks had an average of 41.9 hedge funds with bullish positions and the average amount invested in these stocks was $2615 million. That figure was $10767 million in UBER’s case. Mercadolibre Inc (NASDAQ:MELI) is the most popular stock in this table. On the other hand Equinor ASA (NYSE:EQNR) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks Uber Technologies, Inc. (NYSE:UBER) is more popular among hedge funds. Our overall hedge fund sentiment score for UBER is 97. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 28.6% in 2021 through November 30th and still beat the market by 5.6 percentage points. Unfortunately UBER wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on UBER were disappointed as the stock returned -15.2% since the end of the third quarter (through 11/30) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as all of these stocks already outperformed the market since 2019.

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Disclosure: None. This article was originally published at Insider Monkey.